|*Home *About GMS Intl. *TFSA *Education *RRSP/SDRSP *General Inquiries *Contact Us|
|*Investment Strategies *Independent Investor *Government Bond *Mutual Fund *Stock Investment|
Tax Free Savings/Canada
TFSA under proposed legislation starting January 1, 2016 the annual TFSA dollar limit for 2016-17 will decrease from $10,000 to $5,500.00 and will be subject to indexation.
The Tax Free Savings Account in Canada TFSA is a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax free investment income to more easily meet lifetime savings needs. The TFSA complements existing registered savings plans like the Self-directed Registered Retirement Savings Plans SDRSP also called 401K in USA and the Registered Education Savings Plans RESP.
How the Tax Free Savings Account –Works?
As of January 1, 2013, Canadian residents, age 18 and older, can contribute up to $5,500 annually to a TFSA. This is an increase from the annual contribution limit of $5,000 for 2009 through 2012 and reflects indexation to inflation. The 2015 increases of annual limit contribution of CDN$10,000 effective January 2015.
The full amount of withdrawals can be put back into the TFSA in future years. Re-contributing in the same year may result in an over-contribution amount which would be subject to a penalty tax. Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates GICs and bonds. Contributions are not tax-deductible. Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit. Funds can be given to a spouse or common-law partner for them to invest in their TFSA. TFSA assets can generally be transferred to a spouse or common-law partner upon death.
The TFSA in Canada, it’s called ROTH (IRA) in USA
Roth IRA Limits 2017
The Roth IRA contribution and income limits for the year 2017 and the total amount you can contribute to either a Roth IRA or a Traditional IRA remains unchanged at USD$5,500. People 50/yrs. old & over can contribute an additional $1,000 for a total of $6,500.
Income Limits Bumped Up $1,000
You can only contribute to a Roth IRA, however, if your income is below a certain threshold. For single filers in 2016, that income threshold starts at $117,000 (up from $116,000) and ends at $132,000 (up from $133,000). In that range, your contribution is limited, eventually reaching zero. For married filers in 2016, that income threshold starts at $184,000 (up from $183,000) and ends at $194,000 (up from $193,000).
Roth IRA Contribution Limit in year 2015 USD$5,500 & 2016 USD$5,500
Retirement topics for IRA contributions limits for year 2015 & 2016. Your total contributions to all of your traditional and Roth IRA cannot be more than USD$5,500 (USD$6,500 if your age 50 or older & or…
The IRA contribution limit does not apply to Rollover contribution & claims for Tax deduction of your IRA contributions. You can’t make regular contributions to a traditional IRA in the year you reach 70½ and older. However, you can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of your age.
Can I contribute to an IRA if I participate in a retirement plan at work?
You can contribute to a traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. However, you might not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level.
Tax on excess IRA contributions
An excess IRA contribution occurs if you:
Excess contributions are taxed at 6% per year as long as the excess amounts remain in the IRA. The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.
Copyright © GLOBAL Market Source International. All rights reserved.